Utility cites the diversity of its power sources as one reason.

Jared Anderson works on a panel at a CPS Energy solar farm off Blue Wing Road on the South Side. The solar plant includes 214,500 panels and covers 110 acres. Solar and wind are two sources of green energy used by CPS.

Photo By Mike Fisher

CPS Energy prices below average Electricity prices nationally have been rising faster than the rate of inflation, according to a recent story by USA Today, but CPS Energy customers pay less than both the state and national average for power. The utility, which is owned by the city of San Antonio, owns a diverse fleet of power plants, which helps keep costs down.

CPS Energy customers are paying roughly 20 percent less than the state average for electricity, according to data from the utility and USA Today, which found that household electricity bills have been rising faster than the rate of inflation over the past five years.

Households are paying record prices for their utility bills, the paper found, in part because consumers are using more, and because prices per kilowatt hour have jumped, reflecting higher fuel costs and the expense of replacing old power plants.

The nationwide average now is 11.54 cents per kilowatt hour, the paper reported; in Texas, the average is 11.6 cents.

CPS residential customers paid an average of 9.3 cents per kilowatt hour this year, said spokeswoman Lisa Lewis, and 9.1 cents last year. That includes the fuel adjustment charge, which varies monthly.

The average CPS customer used roughly 1,100 kilowatt hours of electricity per month in 2010, she said, and paid an annual average of $1,262.

USA Today found the average American household paid $1,419 for electricity in 2010.

Lewis said rates are less expensive at CPS because the utility owns its own generation — “so there's no middle man” — and because of the diversity of the fleet: it powers the city with a mix of nuclear, coal, natural gas, wind and solar power.

But CPS rates have gone up and will continue to do so, if not as steeply as the national average.

The utility held rates steady for 17 years before coming to the City Council in 2008 seeking a 5 percent rate increase. The council gave it 3.5 percent, concerned over additional spending on a proposed expansion for the South Texas Project nuclear plant in Bay City.

In 2009, CPS warned the council that it likely would seek rate increases every other year for a decade, in part to pay for the nuclear expansion but also for much-needed infrastructure upgrades and maintenance for a growing system, as well as an increased commitment to renewable energy.

“We have what lots of (utilities) don't have — growth,” Lewis said.

If the nuclear expansion ever takes place, CPS' share is down to 7.6 percent, and it has stopped spending any money on it.

In 2010, CPS sought and received a 7.5 percent rate increase and will be asking the council, likely in early spring, for another increase.

CEO Doyle Beneby has said the amount of that increase will be lower than originally planned because the utility will shutter its two oldest and dirtiest coal units rather than spend $500 million on environmental upgrades.

Thus far, however, the utility has been mum on just how much it will request.

Beneby announced recently that the utility would replace the roughly 850 megawatts that will be lost when the Deely plant closes in 2018 with a natural gas plant. CPS is in negotiations to buy an existing plant.

While historically volatile, natural gas prices are expected to remain low for some time, as shale drilling in the Eagle Ford continues to expand.